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19 July 2011 early edition/transcript/Part 10
Part 10 JOHN WHITTINGDALE: I understand that we are now broadcasting proceedings again. However, we are going to continue in private, with the press and others able to watch in the overflow rooms outside. May I at this stage say that both of you have been very cooperative to this Committee and we have appreciated that. You have answered questions for a long time and I would like to apologise on behalf of the Committee and Parliament for the way you have been treated. I will make a report to Mr Speaker, and I assure you that we will take action to try and find out how that was able to occur. But it is extremely good of you to agree to continue the session and to allow my colleague, Louise Mensch, to finish her questions. RUPERT MURDOCH: Thank you very much, Mr Chairman. JAMES MURDOCH: Thank you, Mr Chairman. LOUISE MENSCH: If I may start by saying, Messrs Murdoch, that I said on Sky News when discussing your initial appearance that it would show guts and leadership for you to show up today and answer questions. I must say that it shows immense guts, Mr Rupert Murdoch, for you to continue answering questions now under the circumstances and after such a lengthy evidence session. I thank you for it. RUPERT: Thank you. Q392 MENSCH: My questions will be just as tough as ever they would have been had that unfortunate incident not occurred. Mr James Murdoch, may I just take you back briefly to before we were so rudely interrupted and the question of the disparity between the settlements? Could you please tell me whether or not the Taylor settlement to your knowledge involved a confidentiality clause that was not present in the settlement for the lesser amount of money? JAMES: I can tell you that the Taylor settlement was a confidential settlement. As to other settlements post that and more recent settlements, I believe that some have been confidential and some not. I don't believe any have been confidential settlements, but I can certainly follow up as to whether or not there have been any. It is customary in an out-of-court settlement of this nature for both parties to agree. There is nothing unusual about an out-of-court settlement being made confidential and being agreed to be confidential, but it was—with respect to the basis of the question, which I think was about the disparity in the amount of money involved, there was nothing in the Taylor settlement, with respect to confidentiality, that spoke to the amount of money. The amount of money was derived, as I testified earlier, from a judgment made about what the likely damages would be and what the likely expenses and litigation costs would have been had the company taken the litigation to its end and lost. Q393 MENSCH: Yes, you have been very clear about that. That is your explanation for the size of the settlement. I merely put it to you that an inference could be drawn if the larger settlements contained confidentiality clauses and the smaller settlements did not. Despite what you say about it being a pragmatic decision based on the costs to the company of not settling, an inference could be drawn that silence was being bought by the presence of the confidentiality clause in the larger settlements. JAMES: And that inference would be false. Q394 MENSCH: Okay, fair enough. Many people—I think this is the nub of it—will find it quite hard to believe that two executives, who nobody would regard as passive, had such little knowledge of widespread illegality at one of your flagship papers. Can I ask you very specifically—Mr James Murdoch first—when did you become aware that the phones not merely of celebrities and members of the royal family but of victims of crime had been hacked? When did you become aware that the phone of the murder victim, Milly Dowler, had been hacked? JAMES: The terrible instance of voicemail interception around the Milly Dowler case only came to my attention when it was reported in the press a few weeks ago and it was— Q395 MENSCH: So only when The Guardian reported it. JAMES: I can tell you, it was a total shock. That was the first I had heard of it and became aware of it. Q396 MENSCH: Is that the same for hacking of other victims of crime? In other words, have you been made aware prior to the Milly Dowler story breaking that your reporters hacked into the phones of any other crime victims? JAMES: No, I had not been made aware of that. Q397 MENSCH: Okay. Just for the record—though you answered my colleague, Jim Sheridan, earlier, you will be aware that it is of lively interest to regulators in the United States—the actor Jude Law is apparently alleging that his phone was hacked on US soil. Given that allegation, are you absolutely confident that no employee or contractor of News Corp or any of its properties hacked the phones of 9/11 victims or their families? RUPERT: We have no evidence of that at all. Q398 MENSCH: Have any credible allegations—? I see you hesitating, Mr James Murdoch. JAMES: No, I was just going to say that those are incredibly serious allegations and they have come to light very recently. We do not know the veracity of those allegations and are trying to understand precisely what they are, and any investigations—I remember well, as all of us do, the September 11 attacks. I was in the far east, living there at the time, and it is just appalling to think that anyone associated with one of our papers would have done something like that. I am aware of no evidence about that. I am well aware of the allegations and will eagerly co-operate with any investigations or try to find out what went on at that time. These are very, very new allegations—just a few days old, I think—but they are very serious and that sort of activity would have absolutely no place; it would be appalling. Q399 MENSCH: From the information provided to you so far—I noted that Mr Rupert Murdoch's answer was emphatic, but your answer, Mr James Murdoch, was somewhat more nuanced—have you received any information that gives you cause for concern that employees of News Corp or contractors of News Corp may have indulged in that kind of hacking? JAMES: No. Not at this moment. We have only seen the allegations that have been made in the press—I think it was in The Mirror or something like that. Q400 MENSCH: So no internal documents, records— JAMES: We are actively trying to know exactly what those allegations are and how to understand anything about them. Q401 MENSCH: You have seen no internal documents, memos or records or received any verbal reports that any employee of News Corp hacked into the phones of 9/11. JAMES: No, definitely not. Q402 MENSCH: Fine, thank you. Have you as a result of a wider review—clearly, this has been a shock to your corporate culture—heard from any of your employees of papers in other countries that phone hacking, blagging or illegal practices may have been happening in those territories, for example, in your Australian properties or in any territory, indeed, where New Corps owns media properties? Are you doing a global review and have you heard of any allegations of phone hacking in your other territories? JAMES: I am not aware of any allegations in any of those other territories. I haven't heard of those allegations. But I would go back to the code of ethics and code of conduct that all of our colleagues at News Corporation globally—be they journalist or management—are required to have. When they join the company and are briefed on those things, it is a matter of real seriousness—the journalistic ethics of any of the newspapers or television channels within the group. Certainly, it is something that, on a global basis, we want to be consistent with and we want to be doing the right thing. When I say that illegal behaviour has no place in this company, that goes for the whole company. Q403 MENSCH: Mr Rupert Murdoch, you are the Chairman and Chief Executive of News Corps. You are the head of the global company. The buck stops with you. Given these allegations, indeed, when you opened the session, you said that this was the most humiliating day of your life— WHITTINGDALE: Humble. MENSCH: Oh, I'm sorry—humble. I beg your pardon. That was a mistake. You said that it was the most humble day of your life. You feel humbled by these events. You are ultimately in charge of the company. Given your shock at these things being laid out before you and the fact that you didn't know anything about them, have you instructed your editors around the world to engage in a root-and-branch review of their own news rooms to be sure that this isn't being replicated in other News Corps papers around the globe? If not, will you do so? RUPERT: No, but I am more than prepared to do so. Q404 MENSCH: Thank you. Two final questions. The first is, you touched earlier, Mr James Murdoch, very briefly on the general culture of phone hacking, blagging and illegal practices that have in the past happened in this country. If I could put a couple of things to you. You do not appear to have asked Piers Morgan, who is now a celebrity anchor at CNN, any questions at all about phone hacking. As a former editor of the Daily Mirror, he said in his book The Insider recently that that "little trick" of entering a "standard four digit code" will allow "anyone" to call a number and "hear all your messages". In that book, he boasted that using that "little trick" enabled him to win scoop of the year on a story about Sven-Goran Eriksson. That is a former editor of the Daily Mirror being very open about his personal use of phone hacking. Yesterday, in Parliament, Paul Dacre— FARRELLY: And News of the World. Q405 MENSCH: And indeed he was a former News of the World executive. He was boasting about a story that happened when he was the editor of the Daily Mirror. Yesterday, Paul Dacre of Associated Newspapers said to a Committee of Parliament, in my view risibly, that the Daily Mail has never in its history run a story based on phone hacking or blagging in anyway. Yet Operation Motorman, of which I am sure your advisers, Mr James Murdoch, will have made you aware, found that the Daily Mail had 50 journalists paying for 902 pieces of information obtained by the private investigator, Steve Whittamore, who had been found to have used some—shall we say?—unorthodox methods. You told me earlier, Mr Murdoch, that your advisers in prepping you to come before the Committee had told you simply to tell the truth, which was excellent advice. Is it not the fact—the truth of the matter—that journalists at the News of the World felt entitled to go out there and use blagging, deception and phone hacking, because that was part of the general culture of corruption in the British tabloid press, and that they didn't kick it up the chain to you, because they felt they were entitled to use the same methods as everybody else? Isn't that the plain fact of the matter? JAMES: Mrs Mensch, I am aware of those reports and the questions around other newspapers and their use of private investigators. But all I can really speak to in this matter is the behaviours and the culture at the News of the World as we understand it and how we are trying to find out what really happened in the period in question. Importantly, it is not for me here today to impugn other newspapers, other journalists or other things like that. Q406 MENSCH: I am asking you if the News of the World felt inured to engaging in these illegal practices, particularly phone hacking, because it was so wide in British tabloid journalism. Did they see it as not as evil as it was because it was so widespread? JAMES: Mrs Mensch, I don't accept that; if journalists on one of our papers, television channels or internet news operations feel that they don't have to hold themselves to a higher standard, I think it is important that we don't say, "Listen, everyone was doing it, and that's why people are doing this." At the end of the day, we have to have a set of standards that we believe in, and we have to have titles and journalists who operate to the highest possible standard. We have to make sure that, when they don't live up to that, they are held to account. And that is the focus for us. Q407 MENSCH: Mister Rupert Murdoch, have you considered suing Harbottle & Lewis? Have you considered suing Harbottle & Lewis? JAMES: I think- I think- Q407 MENSCH: You've said in the past — in one of your first answers to my colleague, Tom Watson — that the reason you did not do an internal investigation is that you relied on the investigation by the police, the investigation by the Press Complaints Commission and the investigation undertaken by your solicitors, Harbottle & Lewis, under whose care this enormous pile of documents was found. There is an old saying, that if you want something doing, you should do it yourself. In this case, you relied on three sets of people, all of whose investigations were severely lacking. Have you considered suing Harbottle & Lewis? JAMES: Any future legal claims or actions in any matter are a matter for the future. Really, today is about how we actually make sure that these things do not happen again. I won't comment or speculate on any future legal matters. Q408 MENSCH: Okay. The file of evidence: you were asked by my colleague Mr Farrelly whether you had read it yourself, and you said no. In the circumstances, where you have relied on other people and advisers and they have severely let your company down, do you not think, Mr Murdoch and Mr Rupert Murdoch, that you ought to take the time and read through everything in that folder personally? JAMES: For clarity, Mrs Mensch, I did say that I did read some of the contents—they were shown to me—and what I saw was sufficient to know that the right thing to do was to hand them over to the authorities to help them with their investigations. Q409 MENSCH: I understand that, but you were shown a representative sample, which can be tricky. In the circumstances and given the enormous reputational damage which I am sure you will be the first to admit has been done to News Corp, do you not think that, as senior executives of the company, you should take the time and read through the entire file, so that you are completely apprised of what happened and are not reliant on everyone else? JAMES: I am happy to do so. I think I have seen a bit of it. Q410 MENSCH: Okay. My last question is for you, Mr Rupert Murdoch. You said that your friend of 52 years I think, Les Hinton, had stepped down and resigned because he was in charge of the company at the time. In other words, he said that he was the captain of the ship, and therefore he resigned. Is it not the case though, sir, that you in fact are captain of the ship? You are the Chief Executive Officer of News Corp, the global corporation— RUPERT: Of a much bigger ship, but yes. Q411 MENSCH: It is a much bigger ship, but you are in charge of it. As you said in earlier questions, you do not regard yourself as a hands-off Chief Executive; you work 10 to 12 hours a day. This terrible thing happened on your watch. Mr Murdoch, have you considered resigning? RUPERT: No. Q412 MENSCH: Why not? RUPERT: Because I feel that people I trusted—I am not saying who, and I don't know what level—have let me down. I think that they behaved disgracefully and betrayed the company and me, and it is for them to pay. Frankly, I think that I am the best person to clean this up. MENSCH: Thank you, Mr Murdoch. As I said, I very much appreciate your immense courage in having seen this session through, despite the common assault that just happened to you. Thank you.